Rupee hits record low of 90.47 against dollar; What this means for your wallet

Mumbai: The Indian rupee, which has been the worst-performing Asian currency so far this year, fell to a new record low of 90.47 against the US dollar on Thursday, losing 0.5 per cent and surpassing its previous all-time low of 90.42 on December 4. The currency closed at 90.3675, down 0.4 per cent for the day following Reserve Bank of India intervention.

Why is the rupee under pressure?

The rupee’s weakness comes amid continuing portfolio outflows and delays in the India–US trade deal, as steep tariffs on exports have begun to bite. Although the greenback softened after a rate cut, it offered little relief due to persistent dollar demand from both foreign and domestic private lenders, likely linked to merchant payments.

Dilip Parmar, foreign exchange research analyst at HDFC Securities, said that many stop-losses were triggered when the rupee hit a new low and that the currency is likely to remain in a downtrend in the near term. He added that the next level to watch is 90.70.

The rupee has depreciated more than 5.5 per cent against the dollar in 2025, affected by US tariffs of up to 50 per cent on goods, which have hurt exports to India’s largest market and reduced the attractiveness of local equities. Foreign investors have withdrawn nearly $18 billion from Indian stocks this year, making the country one of the worst-hit markets in terms of portfolio outflows.

How is the Reserve Bank responding?

Traders said the Reserve Bank of India likely intervened to prevent steeper losses, though not aggressively. RBI Governor Sanjay Malhotra had noted last week that the rupee trading at 90 to a dollar was not a cause for concern, and upwardly revised inflation and GDP forecasts already account for the currency’s depreciation.

What are the broader implications?

Nachiketa Sawrikar of Artha Global Multiplier Fund said the market had been expecting an India–US trade deal by the last week of the month, but now the government has indicated it is likely only by March, adding uncertainty. He noted that this pressure on the rupee is expected to affect foreign institutional investor inflows, which could weigh on equity valuations and impact debt markets.

Analysts at Goldman Sachs highlighted that a record October goods trade deficit and muted capital inflows, along with trade deal uncertainty, point to a further deterioration in the net balance of payments position in the fourth quarter. They also noted that reduced forex intervention by the RBI over the past one to two weeks has increased rupee volatility.